Rice (Oryza sativa) endosperm accumulates a massive amount of storage starch and storage proteins during seed development. However, little is known about the regulatory system involved in the production of storage substances. The rice flo2 mutation resulted in reduced grain size and starch quality. Map-based cloning identified FLOURY ENDOSPERM2 (FLO2), a member of a novel gene family conserved in plants, as the gene responsible for the rice flo2 mutation. FLO2 harbors a tetratricopeptide repeat motif, considered to mediate a protein-protein interactions. FLO2 was abundantly expressed in developing seeds coincident with production of storage starch and protein, as well as in leaves, while abundant expression of its homologs was observed only in leaves. The flo2 mutation decreased expression of genes involved in production of storage starch and storage proteins in the endosperm. Differences between cultivars in their responsiveness of FLO2 expression during high-temperature stress indicated that FLO2 may be involved in heat tolerance during seed development. Overexpression of FLO2 enlarged the size of grains significantly. These results suggest that FLO2 plays a pivotal regulatory role in rice grain size and starch quality by affecting storage substance accumulation in the endosperm.